Sebastián Claro;
Bernardo Blum; Ignatius Horstmann
Abstract: We document several new features of firms’ export entry and exit behaviors: i) one-third of exporting firms enter into and exit from exporting multiple times; ii) most continuing exporters enter and exit specific export destinations multiple times; iii) firms re-entering exporting often sell the same product(s) to the same importer(s). We provide a model in which this behavior is an optimal response for firms facing increasing costs and stochastic demand. The model has a number of predictions that do not come out of models of trade in which firms have constant marginal cost. Our data strongly support these predictions